Binary Options trading is a challenging endeavor that may leave your head spinning. Embrace the challenge and discover what it takes to turn yourself into a successful trader. Trading Binary Options is not easy, but nothing in life worth doing ever is. It takes time and patience to learn any skill, trade, hobby or pass time. The more time you spend, the more mistakes you make, and the more you have to struggle to learn, the better you will be. Just like coal that gets crushed under pressure to yield diamonds you too will emerge from the pressure cooker of the markets a changed and better person.
The Four Challenges of Binary Options
There are some common hurdles to trading Binary Options. Hurdles that I and BOTS.com can help you to at least prepare for, if not overcome. I am going to briefly introduce those areas now and provide links to the best content we have to offer on each subject. One thing I want you all to remember is that the struggle has personal meaning and requires personal commitment, but it doesn’t have to be done all alone. BOTS.com, Bogdan G, Okane, myself and all the guys on the forum are here to help you connect the dots to becoming a successful trader.
First Challenge – What are Binary Options?
It is obvious since this is a new niche there comes most general question – what are binary options. Binary options are actually a simplified financial products that are based on assets, indices, currency pairs and commodities that are traded on the market. You have only two outcomes when it comes to trading binary options and these two are simple, win or lose. Basicly what you have to do is to determine if the price of the asset you want to trade is going to be upa fter the expiration time is over or down. If you win, you get the predettermined profit and if not you have lost your inital investment. You also have few different binary options for trading such as high or low, range, one touch, 60 seconds, etc.. Each is similiar and different from one another. You can read here in more depth what binary options are. You can even check our school section where we try to learn you from start to finish.
The first struggle many new traders face is the question of just what is a Binary Option. Binary Options are simple financial vehicles based on traded assets, indexes, futures, commodities and currency pairs. Unlike other trading vehicles Binary Options only have two possible outcomes, win or lose. If the underlying asset closes “in the money” you profit by a predetermined amount and if it closes “out of the money” you lose. In the world of international Binary Options there a few different kinds of options including high/low, boundary, one touch, 0-100 and 60 seconds binary options. Each has different characteristics and uses so be sure to at least familiarize yourself with each types of binary options. The Binary Options Trading School at BinaryOptionsThatSuck.com is a great place for new or experienced traders to learn more about binary options and binary options trading.
Second Challenge – Fundamental Analysis
The second struggle traders face, and this is one that is not limited to new traders, is fundamental analysis. This is the study of the underlying factors that drive the market, basically it means trading the news. In forex this could be central bank policy or interest rates, in the stock markets this could mean consumer trends or product demand. In the end, though fundamental analysis is a measure of how a company, currency, index or commodity is doing in the real world. One of the best fundamental analysts I know is Richard Cox. His insight is so deep that sometimes he leads the markets by days, weeks or even months.
Next challenge on the list we have is fundamental analysis. This is basicly a research that you have to do on daily basis in order to know what is going on with the market and the prefered assets you wish to trade. It all depends on what you wish to trade, if it is currency then you have to focus more on bank policies or interest rate while if you like to trade stocks you should keep up with latest news of your company. This is basicly analysis of how they are performing in our real world.
The Third Challenge – Technical Analysis
After the fundamental we should not forget the important technical analysis. This is where you need to check charts of the prefered assets and their price actions. If you study charts and apply the knowledge from the past performances of the chart, you can soon see there are some patterns forming. But traders have different strategies for that. You do need to make sure to do this part good since you can predict if you will be in profit or not with technical analysis. Here comes the challenge and struggle since you need to learn on how to do all of this and apply it. To make sure you are doing good is to recognize and identify the signals for trading from the charts you are looking at. The technical and fundemntal analysis can and should work hand in hand.
This is the study of financial markets using charts of price action. Technical analysis assumes that everything is known by the market or soon will be and that knowledge is evident in the charts. Past prices, past and current performance and price action all have bearing on future prices. By studying the charts and applying some well known, tried and true technical analysis techniques you can accurately predict market direction with targets. The struggle is learning to read a language that continually changes. The key is learning to recognize the identifiable and predictable signals and apply them to your fundamental analysis.
The Fourth Challenge – Putting it all Together!
The fourth and final struggle is tying it all together. Trading is a complicated task, do not misjudge the undertaking. You will have a hard time, it is not easy but struggle is good when learning binary options. If it was easy, simple or a snap everyone would be doing it and we would all be Richie Rich and sitting on the beach. Seriously. Tying it all together is the most difficult thing of all and it will take the most time. Like Bruce Lee says, it’s all about practice, the more you practice the better you will get and eventually you will be able to trade like the Dragon.
Eventually you will learn to ignore the noise, weed out the false signals and overcome the fear. You will discover that you are not who you were when you started, you will be a successful Binary Options trader. Until then I suggest joining the forum and participating in the discussions there. That is the number one place I know to engage other traders and analysts. We have threads on all kinds of topics ranging from broker forums discussions to trading tools, strategies and plain old debates on market direction.
To learn binary options trading is definitely a challenge that can leave you with some nights with less sleep. Take it seriously and find out what all is needed in order to become successful trader of binary options. Do not try to take some average road and buying signals, the best is to learn it for yourself since no one can take that away from you. You have to commit, it is not easy since if you want to learn a new skill you will neeed to learn on daily basis for several months and the more you will make it a routine and the more time will pass, the better you will become. There will be a struggle in the learning process but at the end it pays off.
The bottom line
Make sure you take this as a learning process and that nothing comes over night. You can not become rich with trading binary options or anything else. If you put every day few hours to learn on how to trade binary options and learn the process and everything included and make it a routine, you will be able to become a good trader and make profit at the end.